CIT Sustains Decision on State Control of AT&M in China Sawblades AD Case; Could Reverse Revocation
Gang Yan could once again be subject to antidumping duties on diamond sawblades from China (A-570-900), after the Court of International Trade on Oct. 11 sustained the Commerce Department’s decision to treat parent company Advanced Technology & Materials as a state-controlled entity not eligible for its own rate. Commerce had in a March Section 129 determination revoked the order for AT&M and its subsidiaries, Gang Yan and Yichang HXF, because the elimination of zeroing methodology dropped the companies' original investigation rate to zero (see 13032716]). CIT's decision may now subject the companies to the China-wide 164.09 percent rate, and may also make them ineligible for the separate, company-specific zero rate calculated in the Section 129 determination.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Despite its earlier finding that AT&M and its subsidiaries are free from state control, Commerce now says employees of a state-owned company that sat on AT&M’s board were active in selecting AT&M’s management. Commerce reversed its decision under protest. The rate was the subject of two remands (see 12121102), and this time Commerce said the court had directed it to find the companies were state controlled. CIT denied that it had issued any directions to Commerce, saying it only asked for more explanation, but accepted the changed result all the same.
A lawyer with knowledge of the case said the decision is almost certain to reverse the Section 129 revocation for AT&M, Gang Yan, and Yichang. CIT Judge Musgrave said as much in a March opinion that blocked liquidation of entries affected by the case: "If the AT&M entity is actually part of the [China]-wide entity, as argued by [the Diamond Sawblades Manufacturers Coalition], then the margin for the AT&M entity would rise to 164.09 percent without regard to zeroing methodology. This would effectively reverse any revocation made pursuant to the final section 129 determination," Musgrave said (see 13032902). Entries of sawblades from AT&M, Gang Yan, and Yichang have had liquidation suspended since January 2009, so the rate for all of these entries would rise to 164.09%, costing one of the biggest Chinese sawblade exporters millions of dollars, the industry lawyer said.
The decision came on the same day as a ruling on Korean diamond sawblades that calls into question the revocation of that order for several other companies, the industry lawyer said. The Korea decision is still confidential.
Jeffrey Neeley of Barnes Richardson, who represents AT&M, Gang Yan and Yichang, disagrees that the court's decision will reverse the earlier Section 129 revocation. "This appeal only addresses the original investigation and has no effect on the Section 129 case, which is subject to a different appeal," Neeley said. Musgrave's March injunction is also on appeal, and oral argument is currently set for Nov. 6, Neeley said. "We will see what the Federal Circuit says about the opinion of Judge Musgrave," he said.
Neeley said AT&M may appeal the Oct. 11 decision as well. "As expected, the court has affirmed the decision of the Commerce Department, which Commerce issued under protest. Because this decision forces a change in approach to separate rate companies from the approach that Commerce has taken for many years, we will be carefully reviewing the decision to determine our next steps.
Daniel Pickard of Wiley Rein, who represents the Diamond Sawblades Manufacturers Coalition, lauded the Oct. 11 decision. “This is a major win for the U.S. industry and its workers, he said.. "The DSMC has worked very hard over these past four years to point out the extent which Gang Yan is controlled by the Chinese Government. The CIT’s decision to affirm the Department of Commerce determination is an important step toward establishing a level playing field in the U.S. market," said Pickard. "U.S. manufacturers can compete with any other company in the world, but they should not have to compete against the government of China.”
(Advanced Tech. & Materials Co., Ltd. v. U.S., Slip Op. 13-129, dated 10/11/13, Judge Musgrave)